SilverJK Posted September 2, 2008 Share Posted September 2, 2008 I'm going to be in the market to purchase a rehab home this coming summer. If the home is not livable, and rennovations take several months to complete, how does this affect my property taxes. I will be living in an apartment until September, so I'm hoping to buy something in May/June so i have a few months to rennovate it before moving in. Is this going to kill me as far as paying taxes on a piece of property i'm not even living in?more information: The house will be a bungalow in the Heights area.thanks,Curt Link to comment Share on other sites More sharing options...
goastros Posted September 2, 2008 Share Posted September 2, 2008 You are allowed one homestead exemption. Since you cannot claim your apartment if you are renting, claim the new house as your exemption. Put a cot in and if anyone questions you, you are sleeping at the house and showering at the apartment. Get your address on your license changed and forward your mail to the new house. No one will question you. Link to comment Share on other sites More sharing options...
SilverJK Posted September 2, 2008 Author Share Posted September 2, 2008 Sounds like a plan! What should i do as far as avoiding my taxable value increasing after i finish restoration? I mean i know its technically worth more, and that is fine, but i don't want the rate to skyrocket like 30% or more. Does the 10% cap thing work with restorations? Link to comment Share on other sites More sharing options...
musicman Posted September 2, 2008 Share Posted September 2, 2008 Sounds like a plan! What should i do as far as avoiding my taxable value increasing after i finish restoration? I mean i know its technically worth more, and that is fine, but i don't want the rate to skyrocket like 30% or more. Does the 10% cap thing work with restorations?nope. any improvements will be reflected as best as possible, esp if you get a permit. Link to comment Share on other sites More sharing options...
SilverJK Posted September 2, 2008 Author Share Posted September 2, 2008 is refinishing considered an improvement? I mean paint, drywall work, floor refinishes, those aren't exactly improvements... I'm thinking i should have it reappraised before i do any "cosmetic" improvements??? Link to comment Share on other sites More sharing options...
musicman Posted September 2, 2008 Share Posted September 2, 2008 is refinishing considered an improvement? I mean paint, drywall work, floor refinishes, those aren't exactly improvements... I'm thinking i should have it reappraised before i do any "cosmetic" improvements???renovations as you mentioned initially versus cosmetic improvements are different IMO. Link to comment Share on other sites More sharing options...
SilverJK Posted September 2, 2008 Author Share Posted September 2, 2008 so any suggestions on the order of restore/renovation (with re-appraisal in mind)? I'm thinking foundation, electric, plumbing, sewage, are the ones that i want to make sure to have a permit for. Those are also the things I won't be doing myself. Link to comment Share on other sites More sharing options...
RedScare Posted September 2, 2008 Share Posted September 2, 2008 is refinishing considered an improvement? I mean paint, drywall work, floor refinishes, those aren't exactly improvements... I'm thinking i should have it reappraised before i do any "cosmetic" improvements???Painting and refinishing are maintanance, not renovation. They do not require permits, and do not affect value, except in one way. A dilapidated house is worth less than a well maintained one. So, while maintaining your home does not increase the value for tax purposes, it does not decrease the value as a dilapidated home would. Link to comment Share on other sites More sharing options...
goastros Posted September 3, 2008 Share Posted September 3, 2008 Do any non-permit work first or invisible work (foundation work, interior work). Save outside sprucing up for last. They won't be going into your house to see what improvements you make. They'll just know from what permits are pulled. Take close up pictures of every defect so you can show what bad shape it's in. That should stretch you for the first couple of years. I think it might be the first 2 years before they institute the 10% cap max per year. Check the appraisal website to make sure. Then after the 2 years paint and landscape the outside. You can't stop the value from going up if the area goes up. We stopped fighting when the vacant lot sold for more than our house and lot. It was a losing battle. At least they were capped at 10% unless you do a significant change like an addition. Link to comment Share on other sites More sharing options...
insidehouston Posted September 7, 2008 Share Posted September 7, 2008 Also when you are planning out your financials I would take into account that the house might sit on the market for a bit. Althought the Houston real estate market is doing better than California it still is feeling the affects of the national real estate slump. I have talked to flippers that got burned because their plan was "fix and then put on market for immediate sell" This is probably unrealistic unless you price it lower than market value. Link to comment Share on other sites More sharing options...
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